Issues Motivated Author To Study Causes Of American Industrial Success

Review Essay 1
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February 12, 2018
1 Explain the modern economic issues that motivated the author to study the causes of American industrial success.
1 The main reason as to why the author of the article examined the causes of American Industrial success is to shed light on the seeming “loss of competitive edge” by the US these days. Particularly, the question behind the paper is whether this loss is attributed towards less technological innovations within the country (relative to other countries), which is believed to be its main source of advantage ever since the beginning. In order to answer this, Wright (1990), focused on studying manufactured goods and trends between the years of 1879-1940.
2 On page 654, the author makes a careless error when discussing the Leontief Paradox. Identify the mistake. Give a correct definition of the Leontief Paradox.
2 According to Math KSU (n.d.), The Leontief model is a model for the economics of a whole country or region”. Accordingly, it says that, in any country/region, “there are n industries producing n different products such that the input equals the output or, in other words, consumption equals production”. In line with Wright’s article it is apparent that the definition of Leontief Paradox was not completely stated as he said that “exports were more capital intensive than were competitive imports”.
3 Provide at least one possible explanation for the Leontief Paradox based on the information in the article.
3 One of the examples of the Leontief Paradox is that of Australia. In the article it was stated that despite their natural resources, they were not able to exploit it as early as possible. Going back to the Leontief Paradox, it is said that consumption equals production. Therefore, this is the reason why Australia wasn’t able to produce much.
4 What do the results in Tables 1, 2, and 3 on pages 656 and 657 imply about the capital, skill, and resource intensity of exports relative to imports?
4 By using Eysenbach’s production coefficients, the author were able to trace the “relative coefficient” over the whole period included within the purview of the study (1879-1940). Based on the tables, it shows a different trend per each of the category. In terms of capital, Table 1showed that American exports were indeed more capital intensive than imports, between the years 1879 to 1928. It also shows a decline in the exports/imports ration between the time period. In the next table (table 2 – skills) however, this trend was not seen as the exports/imports ratio did not show a particular trend. Nevertheless, the figures from this table suggests that exports industries are paying higher wages than import competings. Lastly, the third table, it was shown that in terms of manufacturing goods, import industries were steadily rising over the peri...